Before you rush off to gather all the documents for your tax return, beware of some changes in this year’s return, particularly in the areas of rental properties and superannuation. In addition to the changes in the tax return, the ATO has also outlined the top 5 most common mistakes they have seen and will be following up on.

If you’re making the last-minute scramble to gather all your tax documentation, keep in mind there are some changes in this year’s tax return particularly in relation to rental properties and superannuation.

If you own rental property, you should be aware that you are no longer able to claim a deduction for depreciation of second-hand assets in relation to the property in this year’s tax return.

The denial of deduction applies to second hand assets acquired at or after 7.30pm on 9 May 2017 (unless it was acquired under a contract entered into before this time), and second-hand assets acquired before 1 July 2017 but not used to earn income in the 2016-17 income year. In addition, travel expenses related to residential investment properties are no longer deductible.

In relation to superannuation, from 1 July 2017, the spouse income threshold for the tax offset has increased, meaning that more people will be able to claim the offset in this year’s tax return. You may be able to claim an offset of $540 if you made a contribution to your spouse’s super fund in the income year and your spouse’s income is less than $37,000. If your spouse’s income is between $37,000 and $40,000, a part offset may be available.

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The ATO’s 5 most common mistakes

In addition to the changes in the tax return, the ATO has also outlined 5 of the most common mistakes that they have seen, which are:

  1. Leaving out income from temp jobs or money earned from sharing economy;
  2. Claiming deductions for personal expenses, such as home to work travel, normal clothes, or personal phone calls;
  3. No records or receipts kept of expenses;
  4. Claiming for something that wasn’t paid for or was reimbursed;
  5. Claiming personal expenses for rental properties including deductions for the private use of property or interest on loans used to buy personal assets.

Assistant Commissioner Kath Anderson said: “[t]his time we will be paying close attention to claims for private expenses like home to work travel, plain clothes, and private phone calls. We will also be paying attention to people who are claiming standard deductions for expenses they never paid for.”

According to the ATO, around half of the adjustments they make to tax returns are due to the taxpayer having no records or poor-quality records. For those taxpayers who are putting in claims, especially work claims without any evidence, the ATO says it will be checking all the data, either by data-matching against other taxpayers in similar industries to find discrepancies or by contacting the taxpayer’s employer when a “red flag” is raised.

Need help with your return?

If you’re just getting started on your return now and need some help maximising the deduction you’re entitled to or untangling complex tax affairs, we can help. If you didn’t make the 31 October deadline, you may be able to get a concessional lodgement date if you lodge your return with us. Alternatively, we can help you apply for a deferral and give you more time to sort out your affairs.